State commission recommends property tax freeze

A report released Tuesday by a state commission recommends a two-year freeze on property taxes, with a $2 billion budget surplus used to further reduce taxes, along with lowering rates for businesses.

The state Tax Relief Commission recommends a simplified tax structure, including reforms to the state’s primary corporate income tax. The corporate income tax rate should be reduced to 6.5 percent, the lowest since 1968, the panel said.

The rate for manufacturers in Upstate New York should be reduced to 2.5 percent, a new low, with property taxes for manufacturers cut by 20 percent through a state credit program, the commission said.

The state’s temporary utility assessment, scheduled to be eliminated in 2018, should be eliminated for industrial customers next year, with other customers phased out, the commission recommended.

The state’s estate tax threshold of $1 million should be increased to a minimum of $5.25 million, indexed to inflation, with the tax rate lowered, the panel said.

“I look forward to working together with the Legislature to review these recommendations and continue our efforts to reverse the state’s reputation as a tax capital and make New York a friendlier state for families and businesses,” Gov. Andrew Cuomo said in a statement.

Cuomo prompted the formation of the commission, headed by former Gov. George Pataki and former state Comptroller Carl McCall.

“Today’s report from the New York State Tax Relief Commission contains several measures that, if enacted, will ease the tax burden of upstate families and businesses,” said Brian Sampson, the Rochester-based executive director of the Unshackle Upstate coalition of businesses and trade groups.

“We applaud Gov. Cuomo’s continued efforts to rein in state spending and lower taxes.”

If fully implemented, the recommendations will mean $500 million in permanent, annual tax relief for businesses, and $100 million in savings for businesses from the phase-out of energy assessments, said Heather Briccetti, president and CEO of the Business Council of New York State Inc.

“The business tax reform component also includes a merger of the state's corporate franchise tax and bank tax, which will extend income apportionment methodologies that benefit businesses with significant jobs and capital investments in New York State,” said Briccetti, a tax commission member, in a statement.

“This proposal contains other technical reforms broadly supported by Business Council members.”